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GM Posts Whopping $39B Loss for 3Q

Wednesday November 7, 7:25 am ET
By Tom Krisher, AP Auto Writer
GM Posts Whopping $39 Billion Loss for Third-Quarter Due to an Accounting Shift

DETROIT (AP) -- General Motors Corp. posted a $39 billion net loss in the third quarter, as an accounting shift involving deferred tax credits brought an abrupt end to string of three profitable quarters for the nation's largest automaker.

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The whopping loss announced Wednesday was attributed to a $38.6 billion noncash charge largely related to establishing a valuation allowance against deferred tax assets in the U.S., Canada and Germany, as well as mortgage losses at GM's former financial arm, GMAC Financial Services.

A valuation allowance is taken when the future benefit of the deferred tax assets is less likely to be realized.

The net loss amounted to $68.85 per share, compared with a net loss of $147 million, or 26 cents per share, in the third quarter of last year.

The results included a $3.5 billion after-tax gain on the $5.4 billion sale of Allison Transmission in August.